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Safeguard Measures
The right to apply safeguard measures reflects the
recognition that in
some situations
, certain
measures (tariffs that exceed bindings or
quantitative restrictions) may be available to
members to, conditionally and temporarily,
protect domestic industry
against
unforeseeable
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General Safeguard
A WTO Member may impose a safeguard measure (i.e.), temporarily restrict imports of a product to
protect a domestic industry from an increase in imports of a product which causes or threatens to cause serious injuryto the domestic industry.
Safeguard measures can take the form of an
increased tariff (customs duty) at a higher level than the bound rate, or a quota. In principle, the MFN Principle must be observed, as safeguard measures have to be applied irrespective of the source of imports.
GATT Article XIX: Emergency Action on
Imports of Particular Products
If, as a result of unforeseen developments and of the effect of the obligations incurred by a Member under this Agreement, including tariff concessions, any product is being imported into the territory of that Member in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers in that territory of like or directly competitive products, the Member shall be free, in respect of such product, and to the extent and for
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GATT Article XIX
" if, , any product is being imported in such
increased quantities and under such conditions "; and Agreement on Safeguards Art. 2.1
" if, that such product is being imported in such increased quantities, absolute or relative to domestic production, and under such conditions
The reference to increased quantities being
imported, either in absolute or in relative terms, is
an indication of
a surge in imports
. Surge in
imports should be examined in the light of:
the
relevant period
prior to the safeguard
measure to be undertaken; and
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GATT Article XIX and Agreement on Safeguards Article 2.1 " to cause or threaten (to cause) serious injury to domestic producers
"Serious injury" is another concept central to the use of safeguard measures. Before a safeguard measure can be imposed, the WTO Member must have determined that:
Thequantity of imported products has increased (see above);
The domestic industry thatproduces like ordirectly
competitive productsissuffering serious injury or if there is a
threat it will suffer serious injury; and
The cause of the serious injury (or threat thereof) is the increase in imports (causality link).
Agreement on Safeguards Article 3
" A Member may apply a safeguard measureonly following an investigation "
Safeguard investigations under the Agreement on Safeguards has to fulfil certain requirements such as, it must
include public notice for hearings and other appropriate means for interested parties to present evidence, including onwhether a measure is in the public interest.
In critical circumstances, a provisional safeguard measure
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Agreement on Safeguards Article 5.1 level of the safeguard measure
"A Member shall apply safeguard measuresonly to the extent necessary to prevent or remedy serious injuryandto facilitate adjustment "
However, "extent necessary to prevent or remedy serious injury" is not easy to determine. Generally, where quantitative restrictions are imposed, they should normally not reduce the quantities of imports below the annual average for the last three representative years
for which statistics are available, unless clear justification is given that a different level of restriction is necessary to prevent or remedy the serious injury or threat thereof.
Agreement on Safeguards Article 7 duration of the safeguard measure.
A WTO Member may apply safeguard measures
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Forms of Safeguard Measures
Safeguard measures can take the form of an
increased tariff (customs duty) at a higher level than the bound rate (see the "Binding" Principle), or a quota
(see the "QR prohibition" Principle). In principle, the
MFN Principle must be observed, as safeguard measures have to be applied irrespective of the source of imports.
GATT Art XII ‐Safeguard Measures In Situations of Balance‐of‐payment (BOP) Difficulties
GATT Article XII Restrictions to Safeguard the Balance of Payments
Notwithstanding the provisions of paragraph 1 of Article XI, any Member,in order to safeguard its external
financial positionandits balance-of-payments, may
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Special Safeguards (Agriculture)
The special "agricultural" safeguard can be used: Where imports of a productexceed the trigger
volume-a level relating to the existing market access opportunities for that product.
Where the price at which imports of a product enter the territoryfalls below a reference price (the trigger price), which is equal to the average 1986 to 1988 reference price for the product. This reference period was agreed upon by the participants in the Uruguay Round.
If the pertinent WTO Member has reserved its right to use thespecial agricultural safeguard, indicating it in its Schedule.
Safeguard Measures Under GATS
Emergency safeguards in services are expected to allow for the temporary suspension of market access,
national treatmentand/or any additional
